6.7 Conclusion

The State aid regime for the banking sector has not changed as a result of the introduction of the resolution framework. The Commission still assesses State aid awards to failing banks on the basis of the 2013 Banking Communication. This does not, however, mean that the resolution framework has not had an impact on the exercise of State aid control by the Commission. This impact has both an institutional and a procedural dimension.

At an institutional level, the role of the Commission as State aid authority has been extended to the assessment of supranational EPFS. The resolution framework provides for the analogue application of State aid control to the SRF. Moreover, the resolution framework regulates the relation between the SRB and the Commission, as a result of which the SRB has to comply with similar obligations as the Member States when the SRF is used. Similar provisions apply in respect of the ESM DRI on the basis of the ESM DRI Guideline.

Furthermore, with the introduction of the resolution framework, the Commission has acquired the new role of co-resolution authority within the SRM. This entails that the assessment of the discretionary aspects of the resolution decisions taken by the SRB is exercised by the Commission, together with the Council. The Commission has also been empowered to adopt delegated acts to specify further criteria or conditions to be taken into account by the SRB in the exercise of its different powers. Moreover, the Commission checks, as an observer to the SRB meetings on an ongoing basis, that the resolution scheme adopted by the SRB complies fully with the SRMR, balances the different objectives and interests at stake appropriately, respects the public interest, and preserves the integrity of the internal market. Lastly, the resolution framework has introduced the authority for the Commission to make an assessment when certain liabilities are excluded from the application of the bail-in tool under the BRRD or the SRMR. This is without prejudice to the assessment by the Commission under the State aid regime

At a procedural level, the resolution framework impacts the assessment by the Commission of State aid awards. Since the introduction of the resolution framework, the Commission has to apply the State aid regime for the banking sector on aid granted in resolution (resolution aid). This term is not included in the 2013 Banking Communication, as a result of which it is not clear which framework applies to the assessment by the Commission of resolution aid. This chapter has discussed the criteria that can be established based on the Commission’s decision practice in respect of resolution aid. In addition, the Commission has to assess State aid awards not only on compatibility with the internal market under the State aid regime for the banking sector, but also on compliance with intrinsically linked provisions of the resolution framework. As a result, the Commission has to be aware of the dynamics of resolution procedures in its assessment, including the tight timelines.

This chapter has shown that the exercise of State aid control by the Commission after the introduction of the resolution framework is not without challenges. First, the Commission has to deal with tensions between its different roles, while taking its different mandates and the cooperation with the SRB into account. In addition, it has to deal with tensions between different sets of rules. Although the resolution framework acknowledges the priority of the State aid regime for the banking sector, since all the measures that can be taken in the process of resolution of a bank (and also outside thereof) need to account for the State aid rules, the Commission cannot approve a State aid award if it violates intrinsically linked provisions of the resolution framework. As long as these rules overlap or complement each other there may be no real issues in that respect. This is, however, different where these rules contradict each other. Especially in the absence of a (much desired) revision of the State aid regime for the banking sector, it has become challenging to fully comprehend State aid control by the Commission in the banking sector without knowledge of both the State aid regime for the banking sector and the resolution framework.1